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The Value Of Television Advertising In The World Of Digitalization

2358 words - 10 pages

Is TV really dead?
The value of television advertising in the world of digitalization.

Executive summary:

Many marketers wonder about allocating marketing budgets to get the greatest return on advertising investment. This paper answers the question, if the investment in online advertising causes a decrease in popularity of TV advertising. It presents researches done to both online and TV advertising. The statistics speak strongly about the development of online advertising but there are also researches that show the positive impact of online world on the growth of TV channels.
The big advantage of internet advertising is the possiblity of direct interaction with user. On the other ...view middle of the document...

It is widely believed, that in the era of digitalisation television loses their influencing power. Nevertheless, its popularity is not decreasing. In the modern Multiscreen world it is still the medium that is being used in the first place with other devices.
This brief presents statistical data and views on the impact of both television and internet advertising.

2. Less television in the era of digitalization
By 1960 90% American households owned a television (Jordan, Winthrop, 1996). Vicky Frost (2014) in her article “The TV is dead, long live television“ states, that 2013 was the first year, when the number of UK homes with television has dropped. Media regulator Ofcom reports, that 2012 there were 26.33 million households owning a television and the number has fallen to 26.02 million in 2013. In the same time, the number laptops and mobile devices with internet access has been growing rapidly. Whitten, Hightower and Sayeed (2014, p. 49) cite Baghdassarian (2012), who state that one can see the “radical nature of Mobile Devices” when investigating the number of downloads of mobile apps, which is predicted to increase from 45 billion in 2012 to 305 billion in 2016.
According to Nielsen research, in 2013 consumers in US watched more advertising on YouTube than on cable television. comScore Video Metrix reports, that internet users in America watched 3.2 billion ads on Google sites, mainly driven by video viewing by YouTube (Kumar, 2013). YouTube is localized in 75 countries and available in 61 languages. The platform has more than 1 billion users, which spend hundreds of millions of hours watching YouTube videos and the time grows 50% year over year (YouTube, 2014).

3. Innovation allows television thrive

However, Vicky Frost (2014) in her article also states, that people still watch TV, even though they do not own a television themselves. According to Ofcom, from June 2013 to December 2014 the number of BBC iPlayer download requests from tablets and mobile phones grew from 25% to 47%, which means that users still watch TV programs, but on other devices than a TV set.
Technological innovation has changed the TV landscape dramatically. Heritiana Ranaivoson, Joëlle Farchy, Mathilde Gansemer (2013) in their article “Differentiated strategies for digital innovation on television: Traditional channels vs. new entrants” mention two different types of innovation, that influenced television: product and process innovations. Product innovation in television refers mostly to the content and how it is presented to the users. Currently users can influence the decisions and the adoption of innovations, especially as they interact with the TV creators through e.g. social networks.
As far as the innovation in process is concerned, Ranaivoson, Farchy and Gansemer (2013) talk here about creation (i.e. new tools used for filming), production, aggregation (i.e. innovative encoding formats), distribution (i.e. with the help of Internet...

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